Oracle ERP and PLM: The Challenges of Being a One-Stop-Shop
Felix Nilsson posted on June 29, 2017 | 6044 views

The Cloud, databases, memory technology, mobility, business Internet (BI), Internet of Things (IoT), ERP and CRM and even PLM systems — say what you want about Oracle, but there’s no doubt that this behemoth offers a wide range of enterprise solutions.

The company's focus seems to be on offering this wide range of products through the Cloud. The company’s extensive product range has created a market-leading position, which also means that this kingdom of Larry Ellison's is subject to tough challenges from competitors such as SAP, Amazon, and Microsoft.

Oracle’s President and CEO Larry Ellison is known for his larger than life personality and brash statements about competitors, traits that seem to have permeated all layers of the company.

Oracle’s President and CEO Larry Ellison is known for his larger than life personality and brash statements about competitors, traits that seem to have permeated all layers of the company.

Ellison's self-esteem and courage to make bold statements is in some way embedded in the company's DNA, both at a central and a local level.

The Northern European movement is a good example:

"We are, in a way, our own biggest competitor. It is a natural consequence that the breadth of our product offering is our strength,” said Nordic CEO Carl Frögelius, who took over last year. “But it also makes us well equipped to take care of customers' digitization journey.”

ENGINEERING.com met with Frögelius and Jerker Alfrell, the company's ERP sales leader, at Oracle's Nordic headquarters in Stockholm, Sweden. These two are no spring chickens. After more than four years at Oracle, Frögelius is now CEO of the Nordic business. His resumé includes a 14-year stint at HP and six years at DELL. Between 2000 and 2003, he was Sales Director at SAP.

Jerker Alfrell has been heading the ERP sales management for the past six years. Altogether, he has spent 20 years at Oracle.

As Frögelius said, Oracle’s mission is to support the customers' digital journey and, through this, help drive the movement further up into the cloud. "What is particularly characteristic of Oracle is our rapid conversion in the capacity to deliver our products and services in a subscription-based form in the cloud,” Frögelius added.

 

The Strength of the Oracle Cloud Concept

ENGINEERING.com met with Oracle’s Swedish CEO, Carl Frögelius. (Image by: Bosse Johansson)

ENGINEERING.com met with Oracle’s Swedish CEO, Carl Frögelius. (Image by: Bosse Johansson)

Certainly, being a one-stop-shop could be considered a strength. At the same time, many companies want a diversified portfolio of suppliers so they are not overly reliant on a single vendor.

When you sell everything, what reaction do you get?

“If a customer has a problem they want a solution, and it is better that there are not a lot of companies involved in solving the same problem," said Carl Frögelius.

Jerker Alfrell agrees. “In a traditional approach to ERP transformations, companies would make a big bang implementation of a system that covers everything. But we don’t see much of that any longer. More often, companies look more at solving a specific problem or supporting a particular process. Then they keep what they have already invested in the remaining parts.”

Alfrell continued. “Many companies have had great challenges in becoming successful in their transformation programs. The reality out there is not only complex, but also very dynamic. Often the realities have changed before the new stuff has been implemented.”

He adds that this is one of the great values of the cloud. It is a much faster model to deliver on, with the "built-in" advantage that you do not have to deliver everything at once.

“Exactly,” Alfrell said. “Our solutions are modular, which means that you can pick the pieces you need. At the same time, we are focused on using open standards such as Java. It is crucial for efficient implementations that the technology is easy to pair with other solutions.”


Much More Than Databases

When most people hear “Oracle”, they still think of a company that delivers databases. However, a lot has happened since databases dominated Oracle’s business. The cloud-related activities in particular have grown rapidly. During the quarter ending in February 2017, Oracle had revenue $9.2 billion. Of this, cloud offerings represented 13 percent, or $1.2 billion.

"Generally speaking, we have incredibly strong growth in cloud-based solutions. Here we follow the global trend with a growth figure in the triple digits.  Without mentioning a few figures, I can say that we have equally strong growth in other areas.” 

The cloud as an economic engine is an example of the positive commercial effects of the company's widespread product portfolio. The ERP side is another area of growth, which also empowers the PLM sphere.

Oracle has bought a number of ERP companies. To strengthen its previously acquired software, such as E-Business, JD Edwards and Peoplesoft, Oracle announced the purchase of NetSuite for $9.3 billion. NetSuite’s software was built for the cloud from the very start.

With NetSuite, you also have interesting links to PLM side. For several years, the company has been working with PLM and CAD developer Autodesk, which is a partner with NetSuite. In the margin, connections to NetSuite via Oracle's Agile PLM system (which it may be interesting to note, are more a supply chain-centric than a CAD-centric solution) can also be seen. A complex thing to put together, sure; but the cloud connections and investment structure are there. 

“I'm well acquainted with the historic links between Oracle and databases. Our origins in the 80's were databases, but that stamp is beginning to get washed away. We have made a name for ourselves on the application side in the last two decades, and I feel that companies in the industry today have a good idea of what solutions Oracle offers.” 

“Oracle has grown both organically and through acquisitions. We have bought many companies to help complete our product portfolio and achieve the breadth and depth we want much faster,
“Oracle has grown both organically and through acquisitions. We have bought many companies to help complete our product portfolio and achieve the breadth and depth we want much faster," said Oracle's Jerker Alfrell.

"The important thing here is to go from a delivery model, where the customer purchased hardware and software and installed it themselves, to a subscription-based service, regardless of where the physical license or hardware exists. This is a model we really believe in because it is cost-effective for customers, it is flexible and provides agility and ultimately it is a safer system, something that customers are looking for,” Frögelius added.


Who Owns the Data?

In many industries, the implementation of cloud services is proceeding at a slower pace. This is true, for example, in the automotive industry, where companies are sensitive about security issues around intellectual property. The questions often center around where data is stored and who actually "owns" the data when it is stored in the cloud.

"In part, we let customers decide what their delivery model should look like," said Frögelius. “If customers want to keep data within their physical walls then we can do that. However, as a major vendor, we also have high security in our data centers and the services we deliver.”

“Absolutely,” added Alfrell. “If you compare a specific customer situation to how our data centers are structured and how we deliver our services, then it's often concluded, ’Well, this is actually safer than we can accomplish ourselves.’"

He further claims that one of the benefits of Oracle is that it has control of the entire stack. And since it develops software and hardware internally, Oracle has control over the operating systems, database virtualization, middleware and applications, leading to a situation where security is built into all layers.

“We control all layers ourselves, which is unique. We see our level of security around cloud delivery as a major competitive advantage.”

 

The Stack is Connected

Integration is a high priority because most companies’ IT landscapes are very diversified, so integration can offer real efficiency gains. If there is somewhere you can cut lead times, it's often in the interaction between different software solutions.

"It is true,” says Frögelius. “But again, our technology stack is in line with our applications. That integration provides more cost-effective, faster and safer systems. If you take our competitors within SaaS, nobody does what we do. Certainly they deliver a service, but they have technology stacks coming from other providers.”

Jerker Alfrell added that if you look at what analysts say about databases, about performance management systems, or BI and Supply Chain management, Oracle ranks highly in all areas.

"So, it's not just our breadth that's the point, but rather the opposite. We are also very specialized,” Alfrell said.


Oracle's IoT Solutions

When in it comes to the Internet of Things (IoT), Oracle has also made extensive investments. The base platform is called IoT Cloud Services.

“We have added integration solutions to the IoT Cloud Services platform. Some of the applications we released this fall are Asset Monitoring, Production Monitoring, Fleet Monitoring and also ‘Connected Worker,’ which lets you connect workers in a mine or at a construction site. We have ready-built data, analysis and action models. It's not a good idea to collect a lot of data unless you do something with it. Just getting an analysis and a result - what's the value if you can not act on it? We have solutions for this, as well as having linked these IoT applications into our business systems, production systems and asset management systems and our CRM systems.”

Oracle has clearly made the cloud its number one priority. As the company’s new Fusion cloud Platform is expanded, more of both ERP and PLM functionality will be linked to this platform.

“This is the path that will lift Oracle further,” said Frögelius.

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